TMA

TMA1/ECO231 – Micro Economic Theory I

TMA Quiz Questions
TMA: TMA1/ECO231
Matric Number:  SCORE=10.00
ECO231 – Micro Economic Theory I
Mr. Adedeji Abiodun Liadi (aliadi@noun.edu.ng )
1 The price elasticity of a commodity supplied is half, then
2 The term “demand” refers to a
3 If Y on the vertical axis and X on the horizontal axis, if the price-quantity curve for X is downward sloping to the right
4 In economics if taxes on petrol increase, petrol consumption will decrease is an example of what kind of statement?
5 Assume that demand curve for political vest shifts rightward and at the same time the supply curve shifts leftward during election, then
6 Assume that demand curve for political vest shifts rightward and at the same time the supply curve shifts leftward during election, then
7 Economic agents regard MILO chocolates and BORNVITA chocolates as substitutes. If the price of a MILO chocolates decreases
8 When the price of a particular resource with a perfectly inelastic supply
9 When both the price of a substitute and the price of a complement of commodity X rise, the demand for X
10 Every point on or below a budget constraint
11 It not rational for Indifference curves to intersect because
12 If the prices of both goods increase by the same percent, the budget line will
13 The absolute value of the slope of an indifference curve equals
14 The main income effect of a price change of a good is
15 A market equilibrium will occur where
16 Assume that the price of flour used to produce bread increases in the country. Therefore, the equilibrium price of a bread ____ and the equilibrium quantity ____.
17 The income elasticity of demand
18 Assuming that the income elasticity of demand for a good is above 2
19 A concavity of production possibility frontier (curve) shows that the
20 Holding everything constant, the
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  1. You guys have rely make things easy for noun student,pls can you help with TMA ECO153 QUESTION AND ANSWER?

  2. ECO231: Micro Economic Theory I TMA2

    Instructions: Answer All .
    After Submission, you will not be able to answer these questions

    Question 1 : Which of these is not the property of indifference curves
    satisfaction increasing to the northeast
    a change in income will shift the budget line
    positive slope
    not intersecting

    Question 2 : In monopolistic competition, we have
    few firms selling a differentiated product
    few firms selling a homogeneous product
    many firms selling a differentiated product
    many firms selling a homogeneous product

    Question 3 : The quantity that will maximize profit for monopolist will occur where
    marginal revenue exceeds marginal cost by the maximum amount
    total cost exceeds total revenue by the maximum amount
    marginal cost rises to equal marginal revenue
    price equals marginal cost

    Question 4 : Microeconomic theory studies how a free-enterprise economy determines
    the price of goods
    all of the above
    the price of services
    the price of economic resources

    Question 5 : If the demand curves for a monopolist’s commodity are identical in two separate markets, then, by practicing third degree price discrimination, the monopolist
    will increase TR and total profits
    cannot increase TR and total profits
    will charge a different price in different markets
    can increase TR and total profits

    Question 6 : Which of the following methods is not employed in microeconomics
    dissection
    model
    mathematics
    comparative statics

    Question 7 : Monopolistic competition there will be
    a single product and price
    a product group and a range of prices
    strategy toward rival firms
    a product differentiation

    Question 8 : In long-run equilibrium, the pure monopolist (as opposed to the perfectly competitive firm) can make pure profits because of
    high selling prices
    low LAC costs
    advertising
    blocked entry

    Question 9 : The demand curve facing the monopolist
    has a positive slope
    is horizontal at market price
    is vertical at a quantity specified by the monopolist
    has a negative slope

    Question 10 : Which form of monopoly regulation is most advantageous for the consumer
    Price control
    lump-sum tax
    all of the above three forms are equally advantageous
    per-unit tax

    Question 11 : The statement C = D = 10 utils implies
    a cardinal measure of utility only
    none of the above
    an ordinal and a cardinal measure of utility
    an ordinal measure of utility only

    Question 12 : Third degree price discriminating monopoly result in
    all of the above
    different prices for each unit to the same buyer
    different prices to buyers in different markets
    different prices to the same buyer

    Question 13 : With reference to the Cournot model, determine which of the following statements is false
    The solution is stable
    Each duopolist assumes the other will keep its price constant
    Each duopolist assumes the other will keep its quantity constant
    The duopolists do not recognize their interdependence

    Question 14 : At long-run equilibrium, the average cost of production for a monopolist will be
    all of the above
    at the minimum point on the LRAC curve
    on the LRAC curve
    equal to the price

    Question 15 : The meaning of the word “economic” is most closely associated with the word
    scarce
    free
    unrestricted
    unlimited

    Question 16 : Which of these is not the property of budget line
    diminishing marginal rate of substitution
    linear for constant prices
    a shift to the northeast as the size of the budget line increases
    negative slope

    Question 17 : When the industry is in long-run equilibrium, the monopolistic competitor will produce at the lowest point on its LAC curve
    cannot say
    sometimes
    never
    Always

    Question 18 : Profit must be equal to zero for a typical firm in the long run equilibrium because
    product are differentiated
    there is blocked entry
    firms maximizes profits
    entry is easy

    Question 19 : In the case of price leadership by the dominant firm, all the firms in the purely oligopolistic industry will produce their best level of output
    never
    always
    sometimes
    rarely

    Question 20 : One of these topics is covered under the heading if microeconomics
    inflation
    welfare economics
    price theory
    choices of individual decision units

  3. Instructions: Answer All .
    After Submission, you will not be able to answer these questions

    Question 1 : If the price in a perfectly competitive firm is N5, determine its profit function if TC = Q3- 8Q2 + 15Q+ 10
    5Q- Q3- 16Q + 15Q+ 10
    5Q- Q3+ 8Q2 -15Q- 10
    5Q- Q3- 8Q2 + Q
    5Q- Q3- 8Q2 + 15Q+ 10

    Question 2 : When the perfectly competitive firm and industry are both in long-run equilibrium
    P = MR = SMC = LMC
    P = MR = SAC = LAC
    P = MR = lowest point on the LAC curve
    all of the above

    Question 3 : Microeconomics deals primarily with
    comparative statics, partial equilibrium, and positive economics
    comparative statics, general equilibrium, and positive economics,
    dynamics, partial equilibrium, and positive economics,
    comparative statics, partial equilibrium, and normative economics

    Question 4 : Which of the following is incorrect
    Microeconomics is concerned primarily with comparative statics rather than dynamics
    Microeconomics is concerned primarily with the time path and process by which one equilibrium position evolves into another
    Microeconomics is concerned primarily with the problem of what, how, and for whom to produce
    Microeconomics is concerned primarily with the economic behavior of individual decision-making units when at equilibrium

    Question 5 : If demand decreases (shift left) the shortrun market response will be a(n)
    reduction in price and quantity exchanged
    increase in price and a reduction in quantity
    increase in supply
    decrease in supply

    Question 6 : A firm in perfectly competitive market has a cost function of the form C = 5000 – 10Q + Q2 . find the profit – maximizing quantity for the firm if the market price P is N200. Calculate the profit as a function Q
    210Q- 5000 –Q2
    210Q- 5000 -2Q
    200Q – 4000 – 2Q2
    210Q- 5000 -Q

    Question 7 : If a firm produces in the short run, it should select that output for which
    price equals average marginal revenue
    price equals variable cost
    price equal average cost
    marginal revenue equals marginal cost

    Question 8 : The model of perfect competition assumes that
    there may be external benefits of consumption
    there is free entry and exit in markets
    firms may set the price of their products
    producers seek to maximize sales

    Question 9 : The best, or optimum, level of output for a perfectly competitive firm is given by the point where
    MR equals MC
    MR equals AC
    MR exceeds MC by the greatest amount
    MR equals MC and MC is rising

    Question 10 : The short-run supply curve of the perfectly competitive firm is given by
    the rising portion of its MC curve over and above the break-even point
    the rising portion of its MC curve over and above the AC curve
    the rising portion of its MC curve
    the rising portion of its MC curve over and above the shut-down point

    Question 11 : At equilibrium, the slope of the indifference curve is
    greater than the slope of the budget line
    equal to the slope of the budget line
    smaller than the slope of the budget line
    either equal, larger, or smaller than the slope of the budget line

    Question 12 : Which of these is not a key implication or result from model of perfect competition
    economic profit will equal zero
    average fixed costs decline with increased quantity
    price equals marginal cost
    average cost is at its absolute minimum

    Question 13 : In perfect competitive market
    P= AC
    P =MC
    P = AR
    P = TC

    Question 14 : A perfectly competitive firm has its cost function as TC = Q3- 8Q2 + 15Q+ 10. Find the marginal cost of the firm
    3Q – 16Q + 15
    3Q2 – 16Q + 15
    Q2 – 16Q + 15
    3Q2 – 16Q + 0

    Question 15 : Total profits are maximized where
    the TR curve and the TC curve are parallel
    the TR curve and the TC curve are parallel and TC exceeds TR
    the TR curve and the TC curve are parallel and TR exceeds TC
    TR equals TC

    Question 16 : Which of the following are assumptions of the model of perfect competition
    all of the above
    homogeneous goods
    many buyers and sellers
    perfect knowledge

    Question 17 : For a firm in perfect competition market, marginal revenue will
    equal the market price
    be zero since demand curve is horizontal
    increase initially, but then decrease
    be negative

    Question 18 : A firm should cease production in the short run if price
    exceeds average fixed costs
    is less than variable cost
    is less than average cost
    exceeds average variable cost

    Question 19 : If input prices increases as the industry output increases, this is an example of a(n)
    decreasing –cost industry
    constant cost industry
    increasing cost industry
    industry with scale economies

    Question 20 : Which of the following is not a necessary condition for a short run competitive equilibrium
    price must equal exceed average variable costs
    price equals marginal costs
    profit must be greater than zero
    quantity demanded equals quantity supplied

  4. Question 1 : If an oligopolist incurs losses in the short run, then in the long run_.
    the oligopolist will stay in business
    the oligopolist will break even
    any of the above is possible
    the oligopolist will go out of business

    Question 2 : Market shares in oligopolistic industries are typically determined on the basis of_.
    tacit understandings
    covert collusion and cartels
    joint profit maximization
    product development and advertising

    Question 3 : Which of the following is not a necessary condition for a short run competitive equilibrium_.
    price must equal exceed average variable costs
    price equals marginal costs
    profit must be greater than zero
    quantity demanded equals quantity supplied

    Question 4 : If a consumer has an income of N100, the price of bread is N10, and the value of butter is N20, the maximum quantity of bread the consumer is able to buy is_.
    20
    5
    30
    10

    Question 5 : Microeconomic theory studies how a free-enterprise economy determines_.
    all of the above
    the price of goods
    the price of economic resources
    the price of services

    Question 6 : Payment received by households from the sale of resources and resource services are called_.
    business receipts
    goods and services
    household income
    taxes

    Question 7 : Which of the following does not influence the market supply of labour
    substitute goods
    migration
    wages
    leisure

    Question 8 : An indifference curve is a curve which shows the different combinations of two products that_.
    have the same prices
    cost a consumer equal amount
    give a consumer equal marginal utilities
    give a consumer equal total utilities

    Question 9 : The quantity that will maximize profit for monopolist will occur where_.
    total cost exceeds total revenue by the maximum amount
    marginal cost rises to equal marginal revenue
    price equals marginal cost
    marginal revenue exceeds marginal cost by the maximum amount

    Question 10 : Which of these is not a key implication or result from model of perfect competition_.
    price equals marginal cost
    average cost is at its absolute minimum
    economic profit will equal zero
    average fixed costs decline with increased quantity

    Question 11 : Total profits are maximized where_.
    TR equals TC
    the TR curve and the TC curve are parallel and TC exceeds TR
    the TR curve and the TC curve are parallel
    the TR curve and the TC curve are parallel and TR exceeds TC

    Question 12 : A barrier to entry that significantly contributes to the establishment of a monopoly would be_.
    technological progress
    economies of scale
    X-inefficiency
    price-taking behaviour

    Question 13 : Which of the following is incorrect
    Microeconomics is concerned primarily with the economic behavior of individual decision-making units when at equilibrium
    Microeconomics is concerned primarily with comparative statics rather than dynamics
    Microeconomics is concerned primarily with the time path and process by which one equilibrium position evolves into another
    Microeconomics is concerned primarily with the problem of what, how, and for whom to produce

    Question 14 : When the income of a consumer is N20, the price of bread is N5, the price of butter is N2, and the quantity of bread is measure horizontally, the slope of the_. budget line is
    4
    2.5
    0.4
    10

    Question 15 : When total utility increases, marginal utility is_.
    positive and declining
    zero
    negative and declining
    negative and increasing

    Question 16 : Competition among firms in an industry is said to prevail when_.
    the product that each firm makes is different
    a great deal of rivalry exists between firms
    new firms are free to enter an industry and no single firm can influence price
    there is more than one firm in an industry

    Question 17 : The supply curve for a pure monopolist_.
    is the portion of the marginal cost curve that lies above the average variable cost curve
    is perfectly price elastic at the market price
    does not exist
    is upsloping

    Question 18 : The concept of economic profit suggests that_.
    the word profiteering is a synonym
    business cannot succeed without it
    business never have losses
    all opportunity costs have to be counted before profit is calculated

    Question 19 : Which of these is not assumed property of the ordinal preference function_.
    larger quantities are preferred (non-satiation)
    consumer may be indifferent between two commodity baskets
    the ranking are transitive
    a change in income will shift the budget line

    Question 20 : To maximize satisfaction subject to a budget constraint, the consumer should choose the commodity basket that is located where
    the highest possible indifference curve
    all of the above
    MRS=Px/Py
    the highest indifference curve has contact with the budget line

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